Trying to untangle the tangled tax code web

April brings showers and taxes, both of which can create havoc. We can easily see the flood damage from out-of-control showers; see the ravaged buildings, the waterlogged soil, and the breached levees. The damages the new ominous tax code is creating are harder to see.

Sorting out tax cut benefits and damages becomes a tricky web. Paul Krugman, Nobel Prize winner in economics, offers a helpful comparison. He likened the tax cut to going out for dinner with a wealthy acquaintance. “ I’ll take care of everything," he says, and orders you a hamburger. Then he orders himself an expensive steak and a bottle of wine, which he doesn’t share. And when the waiter comes with the check, he points at you and says, "Charge it to his credit card.”

Krugman goes on to remind us of Paul Ryan’s earlier tax cut tweet about the good news of a school secretary saving $1.50 a week on her taxes. What was left out is how that $75.00 savings looks in light of her mother’s Medicare Plan being converted into an insufficient voucher and her father’s Medicaid no longer paying for his nursing home care.

The steak-wine elites are remaking the tax code in their favor. According to Forbes, back in the 1950s and 60s the tax rate for the top earners was more than 90 percent. In the 1970s, it went down to 70 percent. In the 1980s, it was slashed to 50 percent. Presently, the tax rate for the highest income bracket is around 30 percent. These levels don’t account for loopholes, which end up creating much lower rates.

Another thread in the tangled tax web is breaks for corporations. Under the new legislation, the rate for corporate taxes is 21 percent. GM is claiming a $104 million refund on $11.8 billion in 2018 profit. Goodyear is asking for a $15 million refund on $693 million in profits. Halliburton (famous for making $39.5 billion from the Iraq war) will pay $19 million in income taxes on $1.6 billion in profit. U.S. Steel is claiming a $303 million refund on $957 million in profit. The list goes on.

The breaks for corporations supposedly trickle down and create jobs and higher wages for the short-changed hamburger eaters. According to a National Association for Business Economics’ survey, 84 percent of businesses reported that the tax cut passage “have not caused their firms to change hiring or investment plans.” The money ends up going back to investors. This gives even more to the steak-wine affluent. Some of us may own a bit of retirement stock but more than 80 percent of stocks are owned by the wealthiest 10 percent.

According to President Franklin Roosevelt, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” As we untangle the tax web, we see that we aren’t making progress.